Luxembourg: Economy Overview

Luxembourg's stable, high-income economy - benefiting from its proximity to France, Belgium, and Germany - has historically featured solid growth, low inflation, and low unemployment.

Economy Overview

The industrial sector, initially dominated by steel, has become increasingly diversified to include chemicals, rubber, and other products. Growth in the financial sector, which now accounts for about 28% of GDP, has more than compensated for the decline in steel. Most banks are foreign owned and have extensive foreign dealings. Agriculture is based on small family-owned farms. The economy depends on foreign and cross-border workers for about 60% of its labor force. Although Luxembourg, like all EU members, suffered from the global economic slump in the early part of this decade, the country continues to enjoy an extraordinarily high standard of living - GDP per capita ranks third in the world, after Liechtenstein and Qatar. After two years of strong economic growth in 2006-07, turmoil in the world financial markets trimmed Luxembourg's economy in 2008.

GDP (purchasing power parity):

$39.37 billion (2008 est.)
country comparison to the world: 97
$39.74 billion (2007 est.)
$37.78 billion (2006 est.)
note: data are in 2008 US dollars

GDP (official exchange rate):

$54.97 billion (2008 est.)

GDP - real growth rate:

-0.9% (2008 est.)
country comparison to the world: 208
5.2% (2007 est.)
6.4% (2006 est.)

GDP - per capita (PPP):

$81,000 (2008 est.)
country comparison to the world: 3
$82,800 (2007 est.)
$79,600 (2006 est.)
note: data are in 2008 US dollars

GDP - composition by sector:

agriculture: 0.4%
industry: 13.6%
services: 86% (2008 est.)

Labor force:

207,100 of whom 125,400 are foreign cross-border workers commuting primarily from France, Belgium, and Germany (2008 est.)
country comparison to the world: 163

Labor force - by occupation:

agriculture: 2.2%
industry: 17.2%
services: 80.6% (2006 est.)

Unemployment rate:

4.5% (2008 est.)
country comparison to the world: 56
4.4% (2007 est.)

Investment (gross fixed):

20.2% of GDP (2008 est.)
country comparison to the world: 106

Budget:

revenues: $22.42 billion
expenditures: $21 billion (2008 est.)

Inflation rate (consumer prices):

3.4% (2008 est.)
country comparison to the world: 44
2.3% (2007 est.)

Central bank discount rate:

3% (31 December 2008)
country comparison to the world: 107
5% (31 December 2007)

Stock of domestic credit:

$100.8 billion (31 December 2008)
country comparison to the world: 44
$100.9 billion (31 December 2007)

Agriculture - products:

wine, grapes, barley, oats, potatoes, wheat, fruits; dairy products, livestock products

Industries:

banking and financial services, iron and steel, information technology, telecommunications, cargo transportation, food processing, chemicals, metal products, engineering, tires, glass, aluminum, tourism

Industrial production growth rate:

1.7% (2008 est.)
country comparison to the world: 113

Oil - production:

60,640 bbl/day (2007 est.)
country comparison to the world: 90

Natural gas - production:

0 cu m (2007 est.)
country comparison to the world: 163

Current account balance:

$4.928 billion (2007 est.)
country comparison to the world: 38
$4.928 billion (2007 est.)

Exports:

$21.43 billion (2008 est.)
country comparison to the world: 71
$18.26 trillion (2007 est.)

Exports - commodities:

machinery and equipment, steel products, chemicals, rubber products, glass

Exports - partners:

Germany 21.7%, France 17.3%, Belguim 10%, UK 6.5%, Netherlands 6%, Spain 5% (2008)

Imports:

$27.73 billion (2008 est.)
country comparison to the world: 66
$23.09 billion (2007 est.)

Imports - commodities:

minerals, metals, foodstuffs, quality consumer goods

Imports - partners:

Belgium 28.1%, Germany 23.8%, China 18.8%, France 10%, Netherlands 4.9% (2008)

Debt - external:

$1.933 trillion (31 December 2008)
country comparison to the world: 10
$NA (31 December 2007)

Stock of direct foreign investment - at home:

$11.21 billion (31 December 2008 est.)
country comparison to the world: 81

Stock of direct foreign investment - abroad:

$NA 

Exchange rates:

euros (EUR) per US dollar - 0.6827 (2008 est.), 0.7345 (2007), 0.7964 (2006), 0.8041 (2005), 0.8054 (2004)

Source: CIA - The World Factbook